/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q. 40 What is more important, a countr... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 23: Q. 40 (page 577)

What is more important, a country鈥檚 current account balance or GDP growth? Why?

Short Answer

Expert verified

GDP Growth.

Step by step solution

01

Step1. Introduction

Gross domestic product refers to the value of all the finished goods and services manufactured in a fixed time period.

02

Step2. Explanation

GDP represents the health of an economy and hence, it is more important. Higher GDP means improvement in the economy, high employment, higher rates of wages. Whereas when GDP value is low, complete opposite conditions shall prevail in the economy.

The current account balance tells us that the economy is in trade surplus or trade deficit but it doesn鈥檛 talk about the health of the economy. So that鈥檚 why GDP growth is comparatively more important than the current account balance.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

State whether each of the following events involves a financial flow to the Mexican economy or a financial flow out of the Mexican economy:

a. Mexico imports services from Japan

b. Mexico exports goods to Canada

c. U.S. investors receive a return from past financial investments in Mexico

The GDP for the United States is \(18,036 billion and its current account balance is 鈥揬)484 billion. What percent of GDP is the current account balance?

How does the bottom portion of Figure 23.3, showing the international flow of investments and capital, differ from the upper portion?

How did large trade deficits hurt the East Asian countries in the mid-1980s? (Recall that trade deficits are equivalent to inflows of financial capital from abroad.)

If a country is a big exporter, is it more exposed to global financial crises?
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.